Suppose That an Economy Is Simultaneously Experiencing a Budget Deficit

Multiple Choice

Suppose that an economy is simultaneously experiencing a budget deficit and an inflationary gap.If the government attempts to balance the budget,what will be the effect?

A) Real GDP will increase,and the deficit will increase.
B) Real GDP will increase,and the deficit will decrease.
C) Real GDP will decrease,and the deficit will increase.
D) Real GDP will decrease,and the deficit will decrease.